The connector that fused was already the upgraded round connector 

You can fix the problem by adding dielectric grease to the connectors to avoid electrical arcs.

had the same prob with a second hand TC and had to repair myself withe the help of Ali Express. 😉

Is this still a problem with newer bikes? Mine is from 2021, and the cable gets a little warm after a long ride. 

and is this something the y cable can prevent from happening?

A reason for the connector to burn could be:

1] The bike draws mor current as designed. 

2] Connector plugged into the battery without switching of the kill switch, this causes arching and will damage the connector overtime.